The best unsecured credit card to rebuild credit is the Credit One Bank Platinum Visa because it has an annual fee as low as $0, gives 1% cash back on eligible purchases, and starts cardholders off with a $300 minimum credit limit.
An unsecured credit card is one that does not require a security deposit or any other collateral to open the account. When you’re rebuilding credit, it generally means you have a credit score of less than 640. There may also be highly negative items such as an unresolved bankruptcy or charge offs on your credit report. In those circumstances, most unsecured cards that you may qualify for will be costly.
You’ll almost always pay an annual fee. And there may be an additional one-time processing fee as well as monthly account maintenance fees. For example, the Total Visa Credit Card starts with an $89 application-processing fee. Once you actually receive the card, there’s a $75 annual fee for the first year. After that, you’ll be dealt a $48 annual fee, combined with a $6.25 monthly fee. When you’re starting out with a $300 credit limit, all those fees will greatly reduce your available credit.
While Total Visa isn’t a great choice, another good unsecured credit card to rebuild credit is the Official NASACAR Credit Card from Credit One Bank, which also has a starting $300 credit limit and the possibility of no annual fee if your credit warrants it. It also offers 1% cash back on eligible purchases (determined after you apply) and 2% at NASCAR.com. You may also consider a store card such as the Fingerhut Credit Account. It also comes with no annual fee, but your card use is limited to Fingerhut online purchases. That shouldn’t be a major concern when your primary objective is to rebuild your credit.
Here are the best unsecured credit cards to rebuild credit:
Credit One Bank Platinum Visa for Rebuilding Credit: $0-$75 annual fee for the first year, $0-$99 after, based on creditworthiness. $300 minimum credit limit. 1% cash back on eligible purchases (categories determined after you apply). 19.74% - 25.74% (V) regular APR.
Official NASCAR Credit Card from Credit One Bank: $0-$75 annual fee for the first year, $0-$99 after, based on creditworthiness. $300 minimum credit limit. 1% cash back on eligible purchases (categories determined after you apply) and 2% at NASCAR.com. 19.74% - 25.74% (V) regular APR.
Fingerhut Credit Account: $0 annual fee. No disclosed minimum credit limit. 29.99% regular APR. Can only be used for Fingerhut purchases.
Indigo Platinum Mastercard: $0, $59 or $75 annual fee for the first year, based on creditworthiness. $0-$99 after. $300 minimum starting credit limit. 24.9% regular APR.
Milestone Mastercard: $35-$75 annual fee for the first year and up to $99 after, based on creditworthiness. $300 minimum starting credit limit. 24.9% regular APR.
An unsecured credit card is typically not the most cost-effective way to rebuild credit. Because you’re considered a high credit risk, your options are very much limited. In addition, your spending power will be greatly reduced by numerous fees and high interest charges.
A better option to rebuild credit would be to open a secured credit card account. Your odds of approval will be greater because you’ll be setting your own credit limit with a refundable security deposit, usually starting at $200. Secured cards tend not to have one-time and monthly fees, so they end up costing you less in the long run. You’ll also get your deposit back in full when you close your account with no unpaid balance.
Some of the best secured cards for rebuilding credit include the Discover it Secured Card, the Capital One Secured Mastercard, the Citi Secured Mastercard and the OpenSky Secured Visa.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.